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Page 2 of 512345
Category: Security Analysis
Post Modern Security Analysis

Is security analysis a science?

Predicting the future is often not scientific.

A pretense of scientific basis has weakened the usefulness of security analysis in the modern era. Fancy mathematics serve to cloud the minds of investors.

The collapse of Long Term Capital Management and the Crash of 2008 were assisted by the injection of ‘junk science’ into investment decisions.

Can (or should) security analysis be considered ’scientific’?

The investment profession:

A securities analyst’s greatest challenge

Lack of dedication has long been the bane of the security analyst.

The Crash of 2008 raised questions as to the competence of many who work in the profession of security analysis. There are dozens of schools providing professionals with training and certification in this field. However, know-how is not enough.

Commonsense and hard work can be more important than theoretical training and the ability to use the terminology.

This article discusses an endemic problem: Laziness.

Information technology

Fundamental analysis and the data tsunami

Technical analysis: massaging price and volume data

Whereas, in the days of Benjamin Graham, an analyst could count on Standard Statistics to provide the essential facts, three-quarters of a century later, this is no longer true in the case of its successor, Standard & Poor’s.

The tsunami of free financial information and increasingly complex markets, have driven up the cost of traditional security analysis. The less expensive route, technical analysis, is now favored by many. We must move beyond Graham & Dodd if fact-based analysis is to remain relevant.

Page 2 of 512345

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By Q1 2006, stock buybacks had multiplied to five times the level of 2000. Buybacks grew by 25% in 2005, with corporate profits after taxes increasing only 5.5%. At these rates, buybacks will exceed after-tax profits by 2009.
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Some banks are too complex to manage

It is no secret that Citicorp no longer earns the same respect in financial circles as in days of yore. The problem is excessive complexity. This article describes the simplicity of the Citibank operation in 1956 when the bank was the world's most powerful financial institution.
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The decline of mainstream media

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Households save more and invest in equities

Government economic stimulus programs that have sent money directly to US households have resulted in more saving and less spending. Low interest rates have encouraged individuals to move from debt instruments into equities. More ...

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Bond demand exceeds supply for a decade

Over the decade, 1995-2004, the demand for US bonds of all types has surpassed new bond issues in eight of the last ten years. This is the reason that bond prices have held firm, even in 2003, when net new issues reached almost $1.8 trillion. More ...

World Economy

What Is ‘International Liquidity’?

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2010-10-13 16:03